Congressman Doug LaMalfa issued the following statement after the announcement of the reopening of the PPP Loan Program that was renewed under December’s Coronavirus relief legislation. The Reopened PPP Loan Program appropriates $284.45 billion – available to newly eligible businesses that didn’t get a loan in the first round and eligible businesses that need additional support, or “second draw” loans.
“The Paycheck Protection Program has been an impactful and important program that has helped keep our small businesses afloat during the pandemic and ensuing government-mandated lockdowns. Earlier this year, the Small Businesses Administration approved $5 million in PPP loans with an average loan size of $100,000 and saved approximately 51 million jobs across the country. Our North State small businesses now have another much-needed lifeline available to help endure both the COVID-19 pandemic and mandatory shutdowns.”
Reopened PPP Loan Program specifics
- Newly eligible businesses include housing cooperatives, news organizations, business associations (such as local Chambers of Commerce), and Economic Injury Disaster Loans (EIDL) recipients.
- As before, businesses, some nonprofits, independent contractors, sole proprietors, and eligible self-employed individuals are eligible to apply.
- Second draw loans are available to businesses with less than 300 employees and show at least 25% reduction in any quarter of 2020 compared to the same quarter in 2019.
- The maximum loan is generally 2.5 times the average monthly payroll, but companies in food service and accommodation industries are eligible for loans 3.5 times the average monthly payroll.
- Loans can be forgiven when at least 60 percent of funds are used for payroll, with the other 40 percent used on mortgage, rent, and utilities.
- Additional allowances for expenses include costs for personal protection equipment, any spending not covered by insurance that are related to property damage due to public disturbances occurred in 2020 and backpay to suppliers.
- Beginning on Monday, Jan. 11, 2021, the Small Businesses Administration will open the PPP to small businesses that did not receive first draw PPP and newly eligible entities.
- Community financial institution lenders will then be able to make second draw loans on Wednesday, Jan. 13, 2021.
- Soon thereafter, all lending institutions will be able to start giving out both first and second draw loans.
Find the application at sba.gov/document/sba-form-2483-sd-ppp-second-draw-borrower-application-form, fill it out and take it to your local lender.